Mortgage Rates Fall For The Fourth Consecutive Week

April 26, 2002

One-Year Arm Is Lowest Since Week Ending April 1, 1994

McLean, VA ? In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.88 percent, with an average 0.7 point, for the week ending April 26, 2002, down for the fourth consecutive week, from 6.94 percent last week. Last year at this time, the 30-year FRM averaged 7.12 percent.

The average for the 15-year FRM this week is 6.35 percent, with an average 0.7 point, dropping from last week's average of 6.42 percent. A year ago, the 15-year FRM averaged 6.63 percent.

One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.91 percent this week, with an average 0.7 point, down from last week's average of 4.95 percent. This time last year, the one-year ARM averaged 5.97 percent. The 1-year ARM has not been lower since the week ending April 1, 1994, when it averaged 4.65 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

"Although the economy is in recovery, that recovery is more fragile than had been previously thought, and Federal Reserve Chairman Greenspan confirmed this in his recent Senate testimony," said Robert Van Order, Freddie Mac's chief international economist. "A sluggish economy lowers any threat of inflation, thereby lowering mortgage rates.

"In the housing sector, both new and existing home sales for March fell slightly, but that was not unexpected, considering the first two months of the year were at record levels that could not be sustained in the long run. On the plus side, however, the decrease in sales increases the amount of time a house is on the market, giving potential homebuyers more time to find the house that best fits their needs."